Lenzing maintains outlook despite tariffs impact on market visibility

Austrian cellulosic fiber producer Lenzing AG has maintained its full-year earnings guidance despite citing US tariffs policy for putting the brakes on early signs of recovery momentum in its key markets, as per Chemweek.

Lenzing said in an outlook within its second-quarter financial results Aug. 7 that consumers are “anticipated to remain cautious” in the current volatile market and currency environment. In the company’s global bellwether market for cotton, market analysts’ current forecasts anticipate a slight increase in stocks, to about 16.3 million metric tons, for the coming 2025/26 harvest season, it said.

Lenzing confirmed its guidance for the full-year 2025 for improved EBITDA earnings year over year but said the ongoing tariffs conflict and associated uncertainty are “negatively affecting market expectations and are continuing to exert a very restrictive effect on earnings visibility.”

The company added in a results presentation that the trade dispute since April between the US and China has led to a “reconfiguration of textile and nonwovens value chains.” Although developments in US tariff policy in July and early August have brought some clarification, Lenzing said that “high uncertainty remains.” The international tariff measures and resultant uncertainty “led to tangible stress along the textile value chain and slowed the Lenzing Group’s recovery,” it said.

Lenzing posted second-quarter sales of €651 million, slightly lower year over year but falling more significantly from €690 million in the first quarter of this year. A net loss for the quarter of €16.6 million narrowed from a net loss of €38.5 million in the prior-year period but reversed from net profit of €31.7 million in the first quarter. The net profit reported in the first quarter was the company’s first profitable quarterly return since the third quarter of 2022.

The company said its EBITDA margin rose 17% year over year, with the margin for the first half of 2025 increasing 20%.

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LG Chem Ltd. said that its petrochemical business generated second-quarter revenue of 4.6 trillion South Korean won ($3.3 billion), a decline of 5.7% year over year, as per Chemweek.

The petchem unit experienced a significant shift, swinging to an operating loss of 90 billion won from an operating profit of 46 billion won in the previous year.

The company attributed this downturn to cautious purchasing sentiment influenced by ongoing US tariff disputes and geopolitical tensions in the Middle East, along with adverse foreign exchange impacts. Despite the seasonal peak demand typically observed during this period, these external factors constrained performance in the company’s petchem sector.

In terms of revenue contribution from various segments within the petchem division, polyolefins accounted for 33%, followed by acrylonitrile-butadiene-styrene at 28%, plasticizers at 15%, acrylates at 10%, high-performance materials at 11% and sustainability products at 3%.

In its outlook, LG Chem expressed cautious optimism regarding its petchem business. While uncertainties surrounding the US tariffs have been somewhat resolved, the company anticipates overall demand will remain subdued as the effects of tariffs continue to linger. The company aims to improve profitability through the normalization of new capacity and ongoing cost reduction initiatives.

In the advanced materials division, LG Chem reported a 50% year-over-year plunge in operating profit, which fell to 71 billion won, while sales declined by 34.6% to 1 trillion won. Within this division, battery materials accounted for 36% of revenue, IT materials contributed 33% and engineering materials made up 31%.

The company noted that shipments in the battery materials sector decreased due to weakened buyer sentiment amid policy uncertainties. However, sales of high value-added IT and engineering materials remained solid.

Looking forward, LG Chem expects demand for battery materials to continue slowing down due to conservative inventory management practices by OEM customers, driven in part by the early termination of IRA subsidiaries.

LG Chem’s other business units include LG Energy Solution, which produces electric vehicle batteries; life sciences; and Farm Hannong Co.

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Kronos Worldwide Inc. (Dallas) reported a second-quarter net loss of $9 million, swinging from net income of $19.5 million in the year-ago period on lower production volumes and lower absorption of fixed production costs, as per Chemweek.

The company said titanium dioxide (TiO2) prices have remained “relatively” stable; however, lower demand and minimal order lead times in the marketplace have pressured prices downward.

Sales totaled $494 million, down 1% year over year. Sales volume was even year over year as pricing fell 1%, Kronos said. Earnings per share came to an 8-cent loss, below the analysts’ consensus estimate of a 14-cent gain, as compiled by S&P Capital IQ.

“The first six months of 2025 have seen unprecedented global uncertainty related to US trade policies and geopolitical tensions,” the company said in its 10-Q filing. “Our customers have been hesitant to build inventories, given these uncertainties, which has prolonged the market downturn and which has impacted our sales volumes and pricing momentum. We had higher overall sales volumes in our European and North American markets somewhat offset by lower sales volumes in our export markets in the first six months of 2025 compared to the first six months of 2024.”

Sales in Europe increased 2% year over year, to $227 million. Sales in North America increased 3%, to $188 million.

Kronos highlighted the uncertainty surrounding the impact of tariffs on the demand outlook for 2025. “Our raw material, energy and other input costs continue to trend lower, and we expect this moderation to continue in the second half of 2025. We expect these cost improvements to be reflected in operating results in the third and fourth quarters of 2025 as the lower-cost inventory produced works its way through cost of sales. However, due to the weaker than expected demand, increasing pricing pressures, and lower fixed cost absorption as a result of reduced operating rates, we expect to report lower operating results for the full year of 2025 as compared to 2024.”

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The European Chemical Industry Council (Cefic) and the American Chemistry Council (ACC) have warned that tariffs above the Chemical Tariff Harmonization Agreement (CTHA) rates risk disrupting the closely integrated transatlantic industry, as per Chemweek.

The CTHA is a strong foundation to address and reduce tariff disparities on chemicals between the two jurisdictions, said ACC’s President and CEO Chris Jahn and Cefic’s Director General Marco Mensink in a joint statement Aug.4. The US and the EU are both original signatories to the CTHA.

They added that they are “encouraged” the July 27 announcement of the understanding reached between the US and the EU avoids measures that could have significantly affected the deeply integrated transatlantic trade and investment relationships in the chemicals sector.

“We are hopeful that this understanding is a step toward further discussions to strengthen our economic and trade relationship, and we encourage both sides to work with our industry to incorporate a binding sectoral agreement on chemical products as a major deliverable of these discussions,” Jahn and Mensink said.

Such an agreement would benefit both sides by increasing bilateral market access for our respective exports and ensuring a level playing field. It would also enhance regulatory cooperation and simplification and support new value chains including mechanical and advanced/chemical recycling, waste management, biomaterials, and carbon capture and utilization solutions, they noted.

“A deeper bilateral commitment for our sector would help secure domestic and resilient manufacturing of chemicals necessary to support innovation and further downstream manufacturing, stimulate R&D, and incentivize tariff agreements with other trading partner countries,” according to Jahn and Mensink.

The chemical industries of the EU and the US have strong and longstanding ties in terms of investment, complementary production chains, research and development, and trade flows. Most EU-US chemicals trade is made up of intracompany and intercompany transfers that sustain jobs on both sides of the Atlantic, they said.

ACC and Cefic said they will provide more detailed comments about the US-EU understanding when further details are confirmed by both sides.

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Despite bearish energy values, ethylene prices remained stable in Asia on Monday, as per Polymerupdate.

An industry source in Asia, on condition of anonymity, informed a Polymerupdate team member, "Prices in the Asian market remained stable due to low trading volumes, with traders exercising caution and generally remaining inactive, even as naphtha prices fell."

On Monday, CFR North East Asia ethylene prices were assessed at the USD 815-825/mt levels, unchanged from Friday's assessed levels.

CFR South East Asia ethylene prices on Monday were assessed at the USD 825-835/mt levels, rolled over from Friday.

In plant news, Shanghai Secco Petrochemical has restarted its Linear low density polyethylene (LLDPE) unit on July 22, 2025 following a turnaround and is currently running the unit at optimum levels. The unit was shut for maintenance on July 3, 2025. Located in Zhejiang, China, the LLDPE unit has a production capacity of 300,000 mt/year.

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